ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Role of Industrial Catalyst

EXPLNDITURE ON DRAWINGS AND OTHER KNOWHOW When I addressed you last year, 1 had referred to the need on the part of the authorities to accord a fair and uniform treatment from the point of view of tax to industries in India which are usually required to pay lump sums to foreign collaborators for drawings and other knowhow. Such payments have neither been allowed as revenue expenditure nor as expenditure of a capital nature which could be written off over a period of time. The Central Board of Direct Taxes has since issued a circular on the subject which I regret to say is a futile exercise in hypothesis and only serves to perpetuate the uncertainty and hardship resulting from disallowance of the expenditure for tax assessments. What is imperative is the need for a sympathetic consideration and clear instructions.

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